Correlation Between Samsung Electronics and Banco Del

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Banco Del at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Samsung Electronics and Banco Del into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Electronics Co and Banco del Bajo, you can compare the effects of market volatilities on Samsung Electronics and Banco Del and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Samsung Electronics with a short position of Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Banco Del.

Diversification Opportunities for Samsung Electronics and Banco Del

0.69

Correlation Coefficient

Samsung Electronics  Banco Del

Poor diversification

The 3 months correlation between Samsung and Banco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo and Samsung Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Samsung Electronics Co are associated (or correlated) with Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Banco Del go up and down completely randomly.

Pair Corralation between Samsung Electronics and Banco Del

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Banco Del. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.45 times less risky than Banco Del. The stock trades about -0.07 of its potential returns per unit of risk. The Banco del Bajo is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  4,350  in Banco del Bajo on September 25, 2024 and sell it today you would lose (83.00) from holding Banco del Bajo or give up 1.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Samsung Electronics Co  vs.  Banco del Bajo

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Banco del Bajo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco del Bajo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward-looking indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Samsung Electronics and Banco Del

The main advantage of trading using opposite Samsung Electronics and Banco Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Banco Del can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Banco Del will offset losses from the drop in Banco Del's long position.

The idea behind Samsung Electronics Co and Banco del Bajo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..